How to Create a Data Loss Prevention Policy

Did you know that employee errors cause nearly 88 percent of all data breaches? Or that the average data breach costs companies $4.24 million per incident? For large companies, that number can soar higher in a hurry, depending on the data lost. 

Luckily, creating a data loss prevention (DLP) policy can help you protect your data. With the right guidelines in place, you can:

• Improve your security
• Teach your employees how to store data, and
• Fall into compliance with government regulation

What Are DLP Policies?

Data loss prevention serves as a roadmap to help you store, protect, and share data. With the proper software, hardware, and employee training, you can keep sensitive data from being compromised. Your policy should also guide your enforcement and prevention processes. 

Why Create a Data Loss Prevention Policy?

In the modern business world, data flows constantly between employees and outside parties. Without an effective DLP policy in place, it’s difficult to keep track of (and control) your data. 

One reason for this challenge is the sheer number of communication channels your employees may use, such as their:

• Emails and IMs
• Shared online folders
• Collaborative software, including live videos

Additionally, employees often share data in several portals. Common channels include their laptops, phones, and the cloud. And as new ways to use data crop up in the work-from-home era, securing your data becomes that much more important. 

How Data Loss Prevention Policies Work

Creating a data loss prevention policy requires you to understand your business and the threats it faces. The best policies are drafted based on a thorough analysis of your unique security needs. Then, you need a specific set of enforceable rules that apply to each level of your business. 

For instance, let’s say an employee uploads a sensitive file to Facebook messenger. Your software may stop the upload from going through and report the incident to the employee’s manager. Then, the software can generate a report and flag it for further review.

But software and similar technologies are only one component of data loss prevention. For effective security, you also need an IT security team, the right hardware, and proper protocols in place. With these tools, you can deal with whatever violations may occur (accidental or otherwise).

6 Steps for Creating a Data Loss Prevention Policy

DLP policies help you fulfill three main functions:

• Staying in compliance with government and industry regulations for sending, receiving, and storing protected data
• Safeguarding your intellectual property and trade secrets
• Gathering valuable insights about how employees, clients, customers, and stakeholders access and interact with your data

To meet these goals, you need a DLP security and auditing policy in place. Then, when a suspicious event crops up, you’ll be well-prepared to investigate and take the proper actions. The following steps can help you create an effective data loss prevention policy. 

1. Evaluate Your Resources

Before you can set up a policy, you need to have the proper personnel on hand. The right people will have expertise in fields such as:

• Risk analysis
• Data protection laws
• Data breach response and reporting
• And training and awareness

Some regulations, like the GDPR, even require you to consult with employees trained in data protection. 

2. Identify and Assess Sensitive Data

Once you have the experts on hand, it’s time to identify what data you need to protect. You can use a data discovery and classification engine to scan your databases and give you insights. 

Start by evaluating the different types of data you use and whether they fall under government protection. (Such as medical records that need to be protected under HIPAA standards.) You’ll also want to identify any business-sensitive intellectual property and trade secrets. 

Next, it’s time to evaluate the risk associated with each type of data were it to leak. For instance, losing information about your company’s internal finances may carry less legal risk than a hacker stealing thousands of customer Social Security Numbers. 

3. Know When Your Data Is at Risk

It’s also important to consider when your data is most at risk. When you distribute data to external devices, share it with partners, or upload or download using the cloud, you inject different levels and types of risk into your data structure. 

Typically, your data is most at risk when the end-user accesses it, such as by opening an email attachment. But it’s also possible for your data to be compromised during transit. 

To mitigate these risks, you’ll want to create a robust data loss prevention program to account for data mobility as well as data storage. 

4. Classify Sensitive Data

After you’ve identified your data, it’s time to classify and label it with the appropriate digital signature. To start, you’ll want to classify data into broad categories like:

• Personally identifiable information
• Customer data
• Payment card information
• Intellectual property and proprietary data
• Public use and public domain data

From there, you can break your data into sub-categories with separate labels and handling processes. And bear in mind that you don’t have to do everything at once. Depending on how much data you handle, you may have to start with the most sensitive information and work your way down. But as your business grows, you can update your classifications. 

5. Create Access Control Lists

Your access control list outlines who can access which information for what purpose. There are two basic ways to design an access control list:

• A whitelist identifies who is allowed to access, use, or download information
• A blacklist identifies who can’t access, use, or download information

You should also install access controls in applications with role-based access. Examples may include your employee databases, directories, and sales records. 

6. Design Your Data Structure 

Once you’ve gathered all your information and specified who can access which information, it’s time to design your data structure from the ground up. Start by formalizing who has permission to use data and outline appropriate storage and archive locations, such as:

• In a specific database
• In the cloud
• On your company services
• On specific pieces of hardware

Additionally, you should establish criteria for evaluating DLP vendors. By knowing what’s acceptable, you can make the most informed purchasing decisions possible. 

You’ll also want to consider how government regulations impact your policy. For instance, if you handle medical data, you may need a different encryption software or process than if you handle financial data. 

Some data loss prevention software even provides pre-configured templates based on HIPAA or GDPR regulations. While you can’t rely on these as substitutes for doing your due diligence, they can help you identify vulnerable data. Many regulation-specific templates also serve as a great DLP policy footprint.  

5 Steps To Implement Your Data Loss Prevention Policy

After you’ve created your data loss prevention policy, it’s time to go about implementing your policy. Depending on your business, that may be easier said than done. 

1. Set Up Data Detection Techniques

One of the first steps is setting up data detection techniques to secure confidential information. Possibilities include:

• Text analysis
• Creating digital fingerprints of sensitive data
• And affixing tags to sensitive information

You can also identify keywords for your software to scan for in your financial documents and contracts. 

2. Encrypt Your Data

You should take steps to encrypt all critical business data while at rest and in transit, including on portable hardware. You’ll also want to install protective software to prevent data breaches and loss, such as software to circumvent malware and suspicious downloads and encrypt your files. 

But during this process, you’ll also want to balance safety with usability. A security-heavy balance may protect your information better but make your systems almost unusable for your employees, which can lower productivity. 

3. Develop and Communicate Controls

Next, you’ll want to work with your managers and IT staff to create your policy. At first, your data usage controls can be as simple as targeting risky behaviors. But as your business matures, you’ll need to develop more granular controls to protect against malicious actors. 

And don’t leave your employees in the dark! Training and periodic retraining can help prevent user mistakes and minimize the weakest links. Moreover, you may want to inform your stakeholders and product users of your data protection policy to safeguard your data (and their own).

4. Set Standards for Responses and Consequences

When you’re creating your data loss prevention policy, you’ll also want to outline a response plan in the event that data losses occur. You should also make distinctions between different types of data losses. 

For example, if an outside attacker steals credit card information, you should know which government and individual parties to inform. But if an employee accidentally downloads trade secrets, you should have policies in place to handle the breach without violating their rights. 

Many DLP solutions come with some responses built-in. For example, if an employee uploads a confidential document as an email attachment, the software may block the upload or redirect the transmission to their manager. You can also set up instant responses like sending users warnings to inform them of the consequences of using certain types of data.  

5. Document Your Policy

Lastly, be sure to document your data policies as you go along. Even if you’re not ready to officially institute your policies, writing down ideas as you go along can help you ensure your policy is well-written and easy to incorporate. 

It’s also important to consider the potential legal ramifications of your policy. Running your outline by a legal consultant can help you understand your rights and where you may violate your employees’ rights. 

For instance, if your policy includes monitoring, recording, or flagging employee activities, you may be in a legal grey area. If you are, it may be time to modify your employee agreements and set up a retraining session. 

Additional Tips for Creating an Effective Data Loss Prevention Policy

At this point, your data loss prevention policy is nearly complete. But with these tips, you can take DLP to the next level. 

Consider Data in All Its Forms

An underrated element of DLP is considering data in its three primary states:

• Data at rest is data sitting in databases, computers, mobile devices, and cloud repositories 
• Data in motion is data currently being transmitted via email, video conferences, or payment transactions
• Data in use is data that employees and users are actively working with or modifying

Moreover, you’ll need to outline aspects like permissible transmission paths, data flows, and rules for processing, modifying, printing, and copying data. 

Automation Is Key

Unfortunately, manual processes are limited in scope and often can’t scale with your business. And the more of your DLP processes you can automate, the easier you can deploy them. But automation comes with risks – for instance, employees needing to fit within constraints such as email attachment sizes. 

As such, you’ll also want to anticipate and approve acceptable workarounds. In the example above, that may include using flash drives or encrypted systems to transfer larger files. 

Define Your Team’s Roles

An underrated component of DLP policies is defining the role of each individual involved in your strategy. This includes everyone from IT techs to members of upper management to your CEO. Specify who:

• Owns the data
• Can access and use the data
• Is responsible for which tasks during incident investigations

Establish Metrics

You can measure the effectiveness of your strategy using metrics like the number of incidents, accurate reports, and average response time. With these, you can evaluate where you’re doing well and your return on investment. 

Monitor Data Usage

Once you set up your system, don’t forget about it! After your policies go into effect, your team should track your data usage. With your software generating automated audits, you can gain an eagle’s eye view into your data loss risk and management. 

Implement Your Strategy in Phases

Creating a data loss prevention policy is a time- and resource-intensive process. And you don’t want to design a spotty or ineffective policy that your employees don’t respect. After all, that leads to inconsistencies and weakens your own security.

Instead, start by prioritizing the data and channels most in need of protection. These may include government-regulated data, personal and payment information, and trade secrets. Then, you can find the proper software and hardware needed to protect your business.